How Tariff Rates are Calculated
Homeowners are charged based on the usage measured by the individual meters located at their private homes. The Tariff rate may change each month, reflected by the charges on the retail energy charges received for the entire community.
Unlike a suburban home, your entire community has just one one single connection to the electricity grid which supplies electricity to all homes through in ground electrical infrastructure. This is known as an embedded network.
The site operator receives an energy bill for the entire community, measured from a single meter at the point of connection. A smart meter in each home then measures the individual homeowner power use as kilowatts per hour.
The energy bill that is received by the site operator is in a different format than is received at a typical suburban home with each line item detailed as opposed to a single tariff (see example below).
When the site operator receives the energy bill for the entire site, the cost per kilowatt hour is calculated. There are two components to this - Energy Tariffs and Network Charges.
Standard Energy Tariffs (Peak, Off-Peak etc.) are charged to the site as for the total power consumed by the entire site for each tariff window while Network Charges are added up and divided by the total energy purchased from the grid to provide a cost per kilowatt hour for all Network Charges. Standard Energy Tariffs plus the Network Charges per kilowatt hour is called a Blended Tariff Rate.
This Blended Tariff Rate is applied to each homeowner for each tariff window so that each homeowner pays their fair share of Network Charges relative to their proportion of energy usage.